Wall St. Banks Fined $1.4 BillionDec 20, 2002 | UPI
Wall Street's top investment banks agreed to pay up a collective $1.4 billion amid accusations that research analysts misled investors, which was a key factor driving up the stock market in the late 1990s. But under the latest agreement, no official will be singled out and be prosecuted or penalized.
The 10 banks will pay $900 million to investors who were particularly hurt by the stock market's collapse as "retrospective relief," while $450 million will be used to fund independent research, and $85 million will be used for "investor education."
"This agreement will permanently change the way Wall Street operates," said New York's Attorney-General Eliot Spitzer, who led the case. "Our objective throughout the investigation and negotiations has been to protect the small investor and restore confidence to the marketplace."
Citigroup's Salomon Smith Barney will be footing the largest portion of the fine at $400 million, while Credit Suisse First Boston and Merrill Lynch will be paying up $200 million each.
As for the seven other banks, namely Morgan Stanley, Goldman Sachs, UBS Warburg, Deutsche Bank, JP Morgan Chase, Bear Stearns, and Lehman Bros., they will be paying $50 million each.